The new UAL going forward?
09-10-2010, 09:11 AM
#2
APC co-founder
Joined APC: Feb 2005
Position: B777
Posts: 5,853
There are tons of management studies that dissect the value of employee engagement, and the impact engagement has on the bottom line (Google it).
The premise is that an engaged employee creates lasting relationships with premium customers which in turn creates bigger profits. UAL employee are familiar with the legacy of Pat Patteson, UAL CEO in the 60's, who understood the benefit of such a culture: "Take care of the employee, the employee will take care of the customer, the customer will take care of the shareholders". Not exactly rocket science.
There are metrics derived from surveys and other performance related tools that measure employee engagement (as a percentage of the overall labor population). The percentage of engaged employees does translate to a real bottomline number of either realized profit or lost opportunity for profit.
One estimate has Southwest Airline's employee engagement at 86% and United's at around 18%. If you applied a number, say $10 Million per percentage point, you can see that benefit of having an engaged labor force. In this example, it could be worth an extra $680 Million to the bottomline by ensuring that the workforce is properly motivated and inspired.
Based on observations and stories related by UAL and CAL employees, it's apparent that both companies are leaving significant amounts of unrealized profits on the table due to dis-engaged labor forces. One would hope that part of the highly touted CAL/UAL merger synergy would include a real effort to repair employee relations as it's good business and improves profit in a measurable way.
That said, it's hard to imagine that the merger will result in any kind of mass enlightenment. My money is on business as usual.
Generic info: benefits of employee engagement - Google Search
The premise is that an engaged employee creates lasting relationships with premium customers which in turn creates bigger profits. UAL employee are familiar with the legacy of Pat Patteson, UAL CEO in the 60's, who understood the benefit of such a culture: "Take care of the employee, the employee will take care of the customer, the customer will take care of the shareholders". Not exactly rocket science.
There are metrics derived from surveys and other performance related tools that measure employee engagement (as a percentage of the overall labor population). The percentage of engaged employees does translate to a real bottomline number of either realized profit or lost opportunity for profit.
One estimate has Southwest Airline's employee engagement at 86% and United's at around 18%. If you applied a number, say $10 Million per percentage point, you can see that benefit of having an engaged labor force. In this example, it could be worth an extra $680 Million to the bottomline by ensuring that the workforce is properly motivated and inspired.
Based on observations and stories related by UAL and CAL employees, it's apparent that both companies are leaving significant amounts of unrealized profits on the table due to dis-engaged labor forces. One would hope that part of the highly touted CAL/UAL merger synergy would include a real effort to repair employee relations as it's good business and improves profit in a measurable way.
That said, it's hard to imagine that the merger will result in any kind of mass enlightenment. My money is on business as usual.
Generic info: benefits of employee engagement - Google Search
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